Moody's Assigns Aa2 to Croton-on-Hudson, NY's GO Bonds

New York, September 16, 2020 -- Moody's Investors Service has assigned a Aa2 rating to the Village of Croton-on-Hudson, NY's estimated $2.6 million Public Improvement (Serial) Bonds, 2020. Moody's currently maintains a Aa2 issuer rating and general obligation limited tax (GOLT) rating on the village. The issuer rating is equivalent to the village's hypothetical general obligation unlimited tax rating (GOULT); there is no debt associated with the GOULT security.

 

The Aa2 issuer rating reflects a modestly sized tax base with a solid socio-economic profile; strong financial position; and above average unfunded liabilities.

 

We consider the outstanding debt to be GOLT because of limitations under New York State law on property tax levy increases. The lack of distinction between the Aa2 GOLT rating and the Aa2 Issuer rating reflects the village board's ability to override the property tax cap and the faith and credit pledge in support of debt service.

 

We regard the coronavirus outbreak as a social risk under our ESG framework, given the substantial implications for public health and safety. The coronavirus crisis is not a key driver for this rating action. The village reports that fiscal 2020 will end with a modest surplus and that revenues were not greatly impacted by coronavirus. However, fiscal 2021 will likely be impacted, particularly in departmental revenues where parking revenues from around the village train station are down considerably. As a result, the village reduced its revenue forecast for 2021, cut expenses and used $285,000 to balance the budget. However, the situation surrounding Coronavirus is rapidly evolving and the longer term impact will depend on both the severity and duration of the crisis. If our view of the credit quality of the village changes, we will update the rating and/or outlook at that time.